Vodafone Idea Shares Jump on Report of Parent's Capital Boost Efforts

Vodafone Idea Shares Surge on Report of Potential Capital Strengthening

Vodafone Idea shares experienced a significant increase of over 10 percent during intra-day trade on Monday, driven by a report suggesting that parent firm Vodafone Group Plc is exploring a proposal to bolster the capital position of the debt-ridden telecom operator.

According to a Bloomberg report, Vodafone Group, which holds approximately 19 percent of Vodafone Idea's stake, is considering transferring a portion of its shareholding to the Indian company to hold in treasury, rather than infusing fresh capital into the business. This proposed move is expected to enhance Vodafone Idea's balance sheet and support its ongoing efforts to raise debt.

Shares of Vodafone Idea settled at Rs 12.19 per share on the NSE, marking an 8.45 percent increase. During the day, the stock reached an intra-day high of Rs 12.43 per share, a 10.58 percent gain.

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The report, citing sources, suggests that Vodafone Idea could monetize the treasury shares at a later stage to raise additional capital for payment of government dues and future expansion. The company is currently engaged in talks with lenders to raise around Rs 35,000 crore in debt. CNBC-TV18 had earlier reported that State Bank of India is likely to lead the lending consortium, with a major portion of the borrowing to be through term loans.

The Government of India is the largest shareholder in Vodafone Idea, holding approximately 49 percent of the company's stake, while Aditya Birla Group also holds a minority stake. Vodafone Idea's shares have gained about 68 percent in the last one year, valuing the company at around Rs 1.08 lakh crore.